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Covanta to acquire Veolia's NA WTE business

 According to the US-based Waste Business Journal, Covanta Holding Corporation (NYSE: CVA), a leader in the de...


 According to the US-based Waste Business Journal, Covanta Holding Corporation (NYSE: CVA), a leader in the development, ownership and operation of waste-to-energy (WTE) facilities and other renewable energy projects, has announced that it has signed a definitive agreement to acquire from Veolia Environmental Services North America Corp., most of its North American WTE business.

The transaction is expected to be accretive to Covanta. The purchase price of $450 million, less net debt and minority interests (subject to certain other adjustments) will be paid in cash.

The Energy-from-Waste operations to be acquired consist of the following:

Facility

Location

Capacity

1.

Long Beach CA

1,380 TPD

2.

Dade, FL

3,000 TPD

3.

Dutchess, NY

450 TPD

4.

Islip, NY

486 TPD

5.

Montgomery, PA

1,200 TPD

6.

York, PA

1,344 TPD

7.

Vancouver, BC

800 TPD

 

The company states:

We expect the entire transaction will close by year end. However, the closing of the transaction may occur in stages and is conditioned upon receipt of customary regulatory and other approvals or consents. The failure to obtain certain approvals or consents may result in the removal of certain businesses from the transaction and a related price reduction.

Each of the seven WTE businesses to be acquired includes a long-term operating contract with the respective municipal client. In addition we will acquire a majority ownership stake in the Montgomery PA facility and a related transfer station operating contract. Collectively, these seven WTE facilities process approximately three million tons of waste per year. The acquired businesses compliment Covanta’s existing portfolio, which includes operation of 38 WTE facilities that process approximately 17 million tons of municipal solid waste annually.

Covanta expects it will achieve meaningful synergies by leveraging its scale, operational expertise and in-house maintenance capabilities. Force reductions are not anticipated at the operating facilities, which employ approximately 500 people. This acquisition is expected to add approximately $60 million of operating cash flow during 2010.

Anthony Orlando, President and CEO of Covanta stated ”We are extremely pleased to announce this acquisition which is consistent with our growth strategy targeting waste to energy development projects and acquisitions in key markets. We look forward to welcoming new customers and employees into the Covanta family and working closely with each client community to build on and improve the service provided.”

La Compagnie Financière Edmond de Rothschild (Paris) and Latham & Watkins LLP (New York) served as financial and legal advisors, respectively, to Covanta in connection with this transaction.

 

About Covanta

Covanta Holding Corporation (NYSE:CVA), is an internationally recognized owner and operator of large-scale Energy-from-Waste and renewable energy projects and a recipient of the Energy Innovator Award from the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy. Covanta’s 38 Energy-from-Waste facilities provide communities with an environmentally sound solution to their solid waste disposal needs by using that municipal solid waste to generate clean, renewable energy. Annually, Covanta’s modern Energy-from-Waste facilities safely and securely convert approximately 17 million tons of waste into more than 8 million megawatt hours of clean renewable electricity and create 10 billion pounds of steam that are sold to a variety of industries. For more information, visit www.covantaholding.com

 

For more information, contact:

Marisa F. Jacobs, Esq.

Vice President, Investor Relations and Corporate Communications

973-882-4196

 

Vera Carley

Director, Media Relations and Corporate Communications

973-882-2439


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